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The impact of ownership structure and the board of directors’ composition on tax avoidance strategies: empirical evidence from Jordan

Author

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  • Amneh Alkurdi
  • Ghassan H. Mardini

Abstract

Purpose - Adopting agency theory, the purpose of this study is to explore the impact of ownership structure and board of directors’ composition on the extent of tax avoidance strategies. Design/methodology/approach - The sample included all of the Jordanian first market companies listed on the Amman Stock Exchange from 2012 to 2017, comprising 348 observations. Findings - The main finding of the paper is that tax avoidance is negatively related to managerial and institution ownership structures, which reduces the usage of tax avoidance strategies. Foreign ownership, however, has a positive relation that increases the likelihood of adopting tax avoidance strategies. Practical implications - This study has policy implications for policymakers in relation to designing future tax systems to reduce the possibility of engaging in tax avoidance practices. Originality/value - To the best of the authors’ knowledge, this study is the first of its kind that investigates the effects of the managerial, foreign and institutional ownership classes and board composition on tax avoidance for Jordanian listed companies.

Suggested Citation

  • Amneh Alkurdi & Ghassan H. Mardini, 2020. "The impact of ownership structure and the board of directors’ composition on tax avoidance strategies: empirical evidence from Jordan," Journal of Financial Reporting and Accounting, Emerald Group Publishing Limited, vol. 18(4), pages 795-812, November.
    • Handle: RePEc:eme:jfrapp:jfra-01-2020-0001
    DOI: 10.1108/JFRA-01-2020-0001
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    Citations

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    Cited by:

    1. Esraa Esam Alharasis & Hossam Haddad & Maha Shehadeh & Ahmad Saleem Tarawneh, 2022. "Abnormal Monitoring Costs Charged for Auditing Fair Value Model: Evidence from Jordanian Finance Industry," Sustainability, MDPI, vol. 14(6), pages 1-21, March.
    2. Ahmad Yuosef Alodat & Zalailah Salleh & Hafiza Aishah Hashim & Farizah Sulong, 2021. "Corporate governance and firm performance: empirical evidence from Jordan," Journal of Financial Reporting and Accounting, Emerald Group Publishing Limited, vol. 20(5), pages 866-896, August.
    3. Eriana Kartadjumena & Nuryaman Nuryaman, 2024. "Ownership Structures, Executive Compensation and Tax Aggressiveness in Indonesia Mining and Plantation Companies: The Moderating Effect of Audit Quality," International Journal of Economics and Financial Issues, Econjournals, vol. 14(3), pages 23-32, May.
    4. Patrick Velte, 2023. "Sustainable institutional investors, corporate sustainability performance, and corporate tax avoidance: Empirical evidence for the European capital market," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 30(5), pages 2406-2418, September.
    5. Mohammad I. Almaharmeh & Ali Shehadeh & Hani Alkayed & Mohammad Aladwan & Majd Iskandrani, 2024. "Family Ownership, Corporate Governance Quality and Tax Avoidance: Evidence from an Emerging Market—The Case of Jordan," JRFM, MDPI, vol. 17(2), pages 1-18, February.
    6. Kadarisman Hidayat & Diana Zuhroh, 2023. "The Impact of Environmental, Social and Governance, Sustainable Financial Performance, Ownership Structure, and Composition of Company Directors on Tax Avoidance: Evidence from Indonesia," International Journal of Energy Economics and Policy, Econjournals, vol. 13(6), pages 311-320, November.

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